Appraisal myths & facts
It is enforced by the government that a real estate appraiser is required to be state-licensed to offer appraisals for federally-supported real estate transactions in Utah. The law allows you to get a copy of your finished appraisal from your lending agency after it has been provided. Contact our professional staff if you have any concerns about the appraisal process.
Myth: Market value will be the same as the assessed value of the property.
Fact: This is not often the case; most states do support the concept that the assessed value is the same as market value, but not always. Usually when interior remodeling has occurred and the assessor is unaware of the improvement or other houses in the neighborhood have not been reassessed for a good length of time, it may vary wildly.
Myth: The buyer or the seller will have leverage in the cost of the property depending upon for whom the appraiser is working.
Fact: There is no real interest on the part of the appraiser in the outcome of the appraisal, therefore he will complete his work with impartiality and independence, no matter for whom the appraisal is conducted.
Myth: Any time market value is found, it should be similar to the replacement cost of the house.
Fact: Market value is based on what a willing buyer would likely pay a willing seller for a particular property, with neither being under duress to buy or sell. The dollar amount needed to rebuild a house is what shows the replacement cost.
Myth: Certain formulae, like the price per square foot, are the methods appraisers use to determine the value of a property.
Fact: Appraisers complete an exhaustive analysis of all factors pertaining to the price of a home, including its location, condition, size, proximity to facilities and recent opinion of value of comparable homes.
Myth: In a strong economy - when the worth of properties in a given neighborhood are reported to be appreciating by a particular percentage - the costs of individual homes in the area can be expected to rise by that same percentage.
Fact: Cost increase of a specific house has to be concluded on a case-by-case basis, factoring in information on comparable properties and other relevant elements. It makes no difference whether the economy is good or on the decline.
Have other questions about appraisers, appraising or real estate in Sanpete County or Ephraim, UT?Contact our professional staff
Myth: The property's outside is determinate of the actual worth of the house; there is no need to do an interior appraisal.
Fact: There are a number of different factors that conclude property value; these factors include location, condition, improvements, amenities, and market trends. As you can see, none of these things can be found simply by inspecting the home from the outside.
Myth: Because the consumer is the party who puts up the capital to pay for the appraisal report when applying for a loan for any real estate transaction, by law the appraisal report belongs to them.
Fact: Legally, the appraisal is owned by the lender unless the lender releases their interest in the appraisal. Home buyers have to be supplied with a version of the appraisal report through request due to the Equal Credit Opportunity Act.
Myth: Home buyers need not worry about what is in their appraisal so long as it exceeds the requirements of their lending company.
Fact: A consumer should definitely read through their appraisal; there might be some questions or some worries with the accuracy of the appraisal report that must be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. There is a wealth of information contained in an report that will probably be useful to the consumer in the future, such as the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the vicinity.
Myth: Appraisers are hired only to estimate house values in property sales involving mortgage-lending deals.
Fact: Based upon their qualifications and designations, appraisers can and may perform a series of different services, including advice for estate planning, dispute resolution, zoning and tax assessment review and cost/benefit analysis.
Myth: There's no reason to get an appraisal if you get a home inspection.
Fact: A home inspection serves a completely different purpose than an appraisal report. The point of an appraisal report is to form an opinion of fair market value during the appraisal process and the completion of the appraisal. The task of a home inspector is to find the condition of the house and its major components, then create a report on their findings.